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Hicksville Water District v. Philips Electronics North America Corp.

United States District Court, E.D. New York

March 29, 2018


          Napoli Shkolnik PLLC Counsel for the Plaintiff, By: Paul J. Napoli, Esq., Tate J. Kunkle, Esq., Of Counsel

          Morgan Lewis & Bockius LLP Counsel for the Philips Defendants, By: John McGahren, Esq., Stephanie Feingold, Esq., Ariel Kapoano, Esq., Of Counsel.

          Greenberg Traurig LLP Co-Counsel for the LIIG Defendants, By: Steven Russo, Esq., Robert Rosenthal, Esq., Evan Preminger, Esq., Of Counsel.

          Sive Paget & Riesel PC Co-Counsel for the LIIG Defendants, By: Mark A. Chertok, Esq., Jonathan Kalmuss-Katz, Esq., Of Counsel.



         On June 25, 2017, the plaintiff Hicksville Water District (“HWD” or the “Plaintiff”) commenced this action against defendants Philips Electronics North America Corporation, and Philips North America LLC (together, “Philips”), as well as Long Island Industrial Group One LLC, Long Island Industrial Group LLC, Long Island Industrial LLC, GSM LI LLC, ICA LI LLC, SAF LI LLC, and FED LI LLC (together “LIIG”) (all together, the “Defendants”). The Plaintiff alleges violations of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), as well as state-law claims of public nuisance, negligence, failure to warn, negligence per se, trespass and private nuisance.

         Presently before the Court are two motions, one by Philips, pursuant to Federal Rule of Civil Procedure (“Fed. R. Civ. P.” or “Rule”) 12(b)(6), seeking to dismiss the complaint for failure to state a claim upon which relief may be granted and another by LIIG seeking the same relief pursuant to Rule 12(b)(6) (together, the “Instant Motions”).

         For the following reasons, Philips' motion to dismiss is granted in part and denied in part and LIIG's motion to dismiss is granted in part and denied in part.

         I. BACKGROUND

         A. The Factual Background

         Unless otherwise noted, the following facts are drawn from the Plaintiff's complaint, and for the purposes of the instant motion, are construed in favor of the Plaintiff.

         The Plaintiff is a public utility based in Hicksville, New York. It serves a 7.9 square mile area and contains two elevated storage tanks, three ground level tanks, and ten plant sites with fifteen public drinking water wells. HWD obtains its water from the Long Island Aquifer System, the principal drinking source for the area. It has been classified as a “sole source” aquifer under the Safe Drinking Water Act of 1974, 42 U.S.C. § 300 et seq. HWD provides water to 48, 000 customers in more than 15, 000 homes and businesses in parts of Hicksville, Bethpage, East Meadow, Jericho, Levittown, Syosset and Westbury.

         Within the HWD is a commercial property located at 230 Duffy Avenue, Hicksville, New York (the “Property”). The Property consists of 6.76 acres of land adjacent to Long Island Railroad tracks and consists of a 122, 900 square foot building and a parking lot.

         On or about 1953, Philips, the owner of the Property at that time, built a factory on the Property which manufactured electron tubes and semiconductors. Two years later, Philips “purchased” Amperex Electronics Corporation and moved their manufacturing operation from Brooklyn, New York to the Property. Philips' manufacturing operations at the site included the machining, heat treating, chemical cleaning, metal and glass working, cathode coating and metal plating processes that included the use of industrial solvents. These manufacturing operations continued from 1953 through 1989.

         Throughout that time, the Plaintiff alleges that Philips' manufacturing process included the use of 1, 4-Dioxane, a synthetic industrial chemical that is completely miscible in water. 1, 4- Dioxane is widely used as a stabilizer in certain chlorinated solvent, paint strippers, greases and waxes. It is classified by the Environmental Protection Agency (“EPA”) as “likely to be carcinogenic to humans” by all routes of exposure. Short-term exposure may cause eye, nose and throat irritation; long-term exposure may cause liver and kidney damage. 1, 4-Dioxane can migrate rapidly into the groundwater and is relatively resistant to biodegradation in the subsurface.

         In 1989, Philips ceased operations and, for all intents and purposes, closed the Property. At that time, the manufacturing equipment was allegedly removed. On February 13, 2007, the Property was purchased by LIIG, the current owner.

         In July 2014, the EPA released monitoring data from one of the Plaintiff's underground wells, Well 4-2, which showed that 1, 4-Dioxane levels were 33 parts per billion (“ppb”) in the well. While the EPA has no standard for 1, 4-Dioxane, the New York State Department of Health (“DOH”) standard is 50 ppb. Allegedly, the Plaintiff is required to “take steps to protect the public health” if levels exceed half the DOH standard.

         As a result of the 1, 4-Dioxane levels, Well 4-2 was taken off-line in January 2015. It has remained off-line ever since.

         In October 2016, the New York State Department of Environmental Conservation (“DEC”) listed the Property as a Superfund site “due to the elevated levels of toxic solvent contaminants in both the groundwater and soil vapor.” There has allegedly been remedial work performed at the Property under the oversight of the DEC.

         The Plaintiff alleges that the Defendants contaminated the Plaintiff's soil, groundwater and potable water supplies by their manufacturing operations, and failure to remediate, contain, or timely notify the Plaintiff, after becoming aware of the above-mentioned contamination.

         HWD is seeking damages for investigation costs, testing costs, treatment costs as well as damages to HWD's property. In total, the Plaintiff is seeking compensatory damages in the amount of $350, 000, 000 and punitive damages of $600, 000, 000.

         B. The Relevant Procedural History

         On June 25, 2017, the Plaintiff filed the above-mentioned complaint in the Supreme Court of the State of New York, Nassau County. The Defendants subsequently filed a joint notice of removal on July 27, 2017.

         On September 11, 2017, Philips moved under Rule 12(b)(6) to dismiss the complaint, contending that the Plaintiff's allegations, even if taken as true, fail to plausibly state claims upon which relief can be granted. That same day, LIIG filed a separate motion under Rule 12(b)(6) also seeking to dismiss the complaint. Both motions are fully briefed. The Court notes that the Plaintiff has withdrawn its private nuisance claim.


         A. Standard of Review: Fed.R.Civ.P. 12(b)(6)

         In considering a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the factual allegations set forth in the complaint as true and draw all reasonable inferences in favor of the Plaintiff. See, e.g., Trs. of Upstate N.Y. Eng'rs Pension Fund v. Ivy Asset Mgmt., 843 F.3d 561, 566 (2d Cir. 2016); Walker v. Schult, 717 F.3d 119, 124 (2d Cir. 2013); Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir. 2006); Bold Elec., Inc. v. City of N.Y., 53 F.3d 465, 469 (2d Cir. 1995); Reed v. Garden City Union Free Sch. Dist., 987 F.Supp.2d 260, 263 (E.D.N.Y. 2013).

         Under the Twombly standard, the Court may only dismiss a complaint if it does not contain enough allegations of fact to state a claim for relief that is “plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007). The Second Circuit has expounded that, after Twombly, the Court's inquiry under Rule 12(b)(6) is guided by two principles:

First, although a court must accept as true all of the allegations contained in a complaint, that tenet is inapplicable to legal conclusions, and [t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss and [d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.

Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 664, 129 S.Ct. 1937, 1940, 173 L.Ed.2d 868 (2009)).

         A complaint must include “a short and plain statement of the claim showing that the pleader is entitled to relief, ” in order to survive a motion to dismiss. Fed.R.Civ.P. 8(a)(2). Under Rule 8, a complaint is not required to allege “detailed factual allegations.” Kendall v. Caliber Home Loans, Inc., 198 F.Supp.3d 168, 170 (E.D.N.Y. 2016) (quoting Twombly, 550 U.S. at 555). “In ruling on a motion pursuant to Fed.R.Civ.P. 12(b)(6), the duty of a court ‘is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof.'” DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 113 (2d Cir. 2010) (quoting Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir. 1998)). The Court “[is] not bound to accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555.

         B. Consideration of Materials ...

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